The Constitution of India grants for an independent office of the Comptroller and Auditor General of India (CAG). He is the leader of the Indian Audit and Accounts Department. He is the caretaker of the public purse and controls the entire financial system of the country at both the levels- the center and state. His responsibility is to uphold the Constitution of India and the laws of Parliament in the field of financial administration.
CAG assist the parliament/state legislatures to hold their respective governments accountable. He is one of the bulwarks of the democratic system of Indian Government; the others being the SC, the ECI, and the UPSC. It is for certain reasons Dr. B R Ambedkar said that the CAG shall be the most important Officer under the Constitution of India and his duties are far more important than the duties of even the judiciary.
Duties of the CAG
- According to the provisions of the constitution, the CAG’s (DPC) (Duties, Powers and Conditions of Service) Act, 1971 was enacted.
- Receipts and expenditure from the Combined Fund of India and of the State and Union Territory having a legislative assembly.
- Trading, manufacturing, profit and loss accounts, and balance sheets, and other subsidiary accounts secured in any Government department; Accounts of stores and stock kept in Government offices or departments.
- Government companies according to the provisions of the Companies Act, 2013.
- Corporations launched by or under laws made by Parliament in accordance with the provisions of the respective legislation.
- Authorities and bodies substantially financed from the Consolidated Funds of the Union and State Governments. Anybody or authority although not substantially financed from the Consolidated Fund, the audit of which may be entrusted to the C&AG.
- Provides and loans are given by Government to bodies and authorities for specific purposes.
- Entrusted audits e.g. those of Panchayati Raj Institutions and Urban Local Bodies under Technical Guidance & Support (TGS).
Types of Audit performed by CAG
Regulatory Audit: It is an audit to ascertain whether the money spent was authorized for the reason for which they were spent and also that the expenditure incurred was in conformity with the laws, rules, and regulations.
Supplementary Audit: CAG takes up supplementary audits in PSUs, even after the commercial audits are made by the auditors appointed by the CAG, for detection of leakages.
Propriety Audit: It aims at whether the expenditure made is in public interest or not i.e. it moves beyond the mere scrutiny of expenditure to question its wisdom and economy in order to identify cases of improper expenditure and waste of public money.
Efficiency Audit: Efficiency audit as the name resembles answers the question whether the money invested yields optimum results. The main objective of the efficiency audit is to ensure that the investment is prioritized and channeled into its most profitable utilization.
Performance Audit: Performance audit answers whether the government programmes such as NREGA have achieved the desired goals at the lowest cost and given the intended benefits. It generally does not get into the merits-demerits of particular projects rather looks into the effectiveness with which the scheme is implemented and any deficiencies thereof.
Environmental Audit: This is a relatively new area of related for the CAG keeping in mind the challenges facing India with respect to conservation and management of the environment. More than 100 audits on environmental issues like biodiversity, pollution of rivers, waste management have been done by the CAG to identify critical issues and suggest possible solutions by involving all stakeholders.